Boardroom malfunction

The U.S. giant has been stuck in a weird battle for control of Yingde Gases, which it wants to buy for up to $2.8 bln including debt. The target’s board finally seems to be seeing sense. Bravo: the suitor is offering a fair EBITDA multiple and a fat premium for shareholders.

Context News

Yingde Gases, the Hong Kong-listed industrial gas supplier, said on Feb. 21 that its chief executive plans to resign after just three months in the role. He Yuanping is resigning due to a potential sale of the company, Yingde said.

Yingde said Beijing OriginWater Technology, where He is chief financial officer, had confirmed it did not plan to buy more shares in Yingde, or to pursue "any strategic transaction" with Yingde. OriginWater owns about 4.2 percent of Yingde, Thomson Reuters Eikon data shows.

U.S. group Air Products made a preliminary, non-binding takeover approach to Yingde in December. Yingde said it would now make a data room available to Air Products, and no longer request a standstill agreement. It had previously requested such an agreement, which would have prevented Air Products from buying a block of shares, as a condition for allowing due diligence.

Air Products has said it was willing to pay HK$5.50 per share for Yingde, and could raise that to HK$6.00 if it was allowed to conduct due diligence.